The economists who emphasised wage flexibility as a solution for unemployment were ?

A. New-keynesian.
B. Post-keynesian.
C. Classical economists.
D. Keynesian.

According to classical models, the level of employment is determined primarily by ?

A. The level of aggregate demand for goods and services.
B. Prices and wages
C. Interest rates
D. The quantity of money

According of Keynes, the level of employment is determined by ?

A. The behaviour of trade unions.
B. The quantity of money
C. Price and wages
D. The level of aggregate demand for goods and services

The nation that the government can establish the macroeconomic is known as ?

A. Fine tuning
B. Monestarism
C. Microeconomics foundations of macroeconomics
D. The classical model

The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?

A. Rational-expectations hypothesis
B. Passive-expectations hypothesis
C. Adaptive expectations hypothesis
D. Lagged-expectations hypothesis.

A group of modern economists who believe that institutional factors and confidence strongly influence business behaviour and that expanding demand will usually increase output rather than prices are the ?

A. Monetarists.
B. Keynesians
C. Post-keynesians
D. New classical school

The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?

A. Consistently overestimate the actual rate of inflation in the future.
B. Are always correct
C. Consistently underestimate the actual rate of inflation in the future
D. Are correct on average, but are subject to errors that are distributed randomly

The persistence of a phenomenon such as unemployment, even then its causes have been removed is called ?

A. The fallacy of composition
B. Negative entropy.
C. Hysteresis.
D. Ceteris paribus

If the demand for money depends on the interest rate the velocity of circulation is ?

A. Not constant and the quantity theory of money does hold.
B. Constant and the quantity theory of money does hold.
C. Not constant and the quantity theory of money does not hold.
D. Constant and the quantity theory of money does not hold.

New classical theories were an attempt to explain ?

A. How unemployment could have persisted for so long during the great depression
B. The increase in the growth rate of real output in the 1950s
C. The stagflation of the 1970s
D. Why policy changes that are perceived as permanent have more of an impact on a person’s behaviour than policy changes that are viewed as temporary.